Markhams Taxi Industry General Committee November 23, 2015 - - PowerPoint PPT Presentation

Markham’s Taxi Industry

General Committee

November 23, 2015 Kimberley Kitteringham, City Clerk Chris Alexander, Acting Manager of By-law & Regulatory Services Carlie Turpin, Public Services Coordinator

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Agenda

1) Background 2) Current Municipal Act Regulatory Framework 3) Overview of Markham Taxi Industry 4) Disruptive Technology Overview 5) Jurisdictional Scan 6) Toronto Experience 7) Regulatory Options 8) Meeting with GTA Municipalities 9) Provincial Update 10) Interim Steps 11) Staff Recommendations

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Background

• At the September 21, 2015 General Committee meeting a

spokesperson for Markham’s taxicab industry addressed Committee regarding concerns with Uber operations in Markham as well as: – The City’s taxicab training requirements – The proliferation of unlicensed taxicabs in Markham & lack of enforcement of same – The City’s licensing fees

• General

Committee briefly discussed Ontario's regulatory framework for the taxicabs & limousines.

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Background

• Staff noted that the emergence of Uber presents a complex public

policy question that municipalities across Canada (& indeed the world) as well as organizations such as the International Association

• f Transportation Regulators (IATAR) are actively reviewing.
• Staff advised that the City has held many consultation sessions with

representatives of Markham’s taxicab & limousine industries over the past few years on a variety of issues, including fares, plate issuance & enforcement.

• At the conclusion of the September 21st General Committee

meeting, staff were requested to report back on what measures Markham can take with respect to Uber given the current Municipal Act provisions.

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Current Municipal Act Regulatory Framework

• Under the Municipal Act, Ontario municipalities are permitted to pass by-

laws with respect to owners & drivers of taxicabs to: – Establish the rates or fares to be charged for taxi services within a municipality or from any point in the municipality to any point

• utside of the municipality;

– Provide for the collection of the rates or fares charged for the service; &, – Limit the number of taxicabs.

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Current Municipal Act Regulatory Framework

• Municipal by-laws cannot restrict, limit or prevent:

– the transport

• f

persons with physical, emotional

• r

mental disabilities; or, – written contracts for the use of a taxicab which can legally operate in the municipality in which the transport begins or ends.

• The Current Municipal Act framework is outdated & insufficient given:

– the fact that the taxicab & limousine industries are no longer constrained to traditional borders; &, – the emergence of the sharing economy & disruptive technology.

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Current Municipal Act Regulatory Framework

• The past several years has seen the emergence of new models of

consuming & accessing goods & services – this is often referred to as the “sharing economy”.

• Companies such as Uber & Airbnb have been on the forefront of the

sharing economy which enables individuals to

• btain

rides, accommodations & a wide range of other goods & services via online platforms in exchange for money &/or non-monetary benefits.

• While these new platforms are popular with consumers & entrepreneurs,

they have drawn significant criticism from established operators & concerns from governments about fair competition & consumer protection.

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Current Municipal Act Regulatory Framework

• The sharing economy has & is expected to continue to have, a

significant global economic impact.

• PWC Canada estimates the 2015 global revenue from sharing economy

companies will reach $15 billion.**

• Municipalities across Ontario, as well as associations such as the

Association of Municipal Clerks, Managers & Treasurers of Ontario (AMCTO), have been calling upon the Province to update the legislation & to implement broader regulatory tools.

** Harnessing the Power of the Sharing Economy - Report produced by the Ontario Chamber of Commerce.

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Current Municipal Act Regulatory Framework

• The City of Markham is the regulator of Markham’s taxicab &

limousine industry.

• Our regulatory goals & objectives are as follows:

1. Public Safety & Consumer Protection

• Safe & secure service for the public
• Appropriate controls & accountability are developed & enforced

2. Quality of Service

• High service levels in safe, clean & comfortable taxicabs
• Knowledgeable & courteous drivers

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Current Municipal Act Regulatory Framework

3. Availability of Service

• Sufficient cabs to meet customer service demands
• Ability to provide service in different forms to meet service demands

4. Reasonable Profitability of Service

• Fair competition in the industry
• Fair service for predictable price
• Fair allocations of costs & profits throughout the industry

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Markham’s Taxicab/Limousine Industry: Snapshot of Major Players

• 192 municipally licensed taxicabs:

– 140 regular taxicabs – 52 airport taxicabs

• 30 municipally licensed limousines
• Unknown number of “bandit” taxicabs
• Unknown number of UberX vehicles for hire

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Markham’s Taxicab/Limousine Industry: Snapshot of Major Players

On Demand Service Prearranged Service

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Markham’s Taxicab/Limousine Industry

• There are a significant number of unlicensed vehicles for

hire operating in the various communities in Markham.

• This industry has existed for over a decade.
• These “bandit” cabs take away as much as 50% of the

business from the licensed taxicabs & limousine industries in Markham.

• Typically these unlicensed operations work from internet &

newspaper ads & strictly service their own communities. It is a sophisticated & organized operation that has been created.

• The City does not yet have a full understanding of the

impact Uber is having on Markham’s industry.

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Markham’s Taxicab/Limousine Industry (Cont’d)

• Owners

& drivers

• f

vehicles for hire (taxicabs & limousines) in Markham are required to comply with specific requirements in order to receive & maintain a City licence.

• Like most By-laws of its kind in Ontario, Markham’s current

Mobile Licensing Bylaw 2012-92 does not currently contain definitions for taxicabs, taxicab owners, taxicab brokers & limousine service companies that are comprehensive enough to encompass companies such as Uber.

• By-law

2012-92 also does not currently contain a prohibition against the dispatching of vehicles operating under Transportation Networks like Uber.

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Markham’s Taxicab Requirements

• The City of Markham’s Mobile Licensing By-law 2012-92 requires the

following criteria be met in order to obtain a taxicab licence: – 18 years of ago or older – Canadian Citizen, landed immigrant, or can provide a valid work permit – Valid Class “G” driver’s licence issued by the Province of Ontario – Driver’s Abstract from the Ministry of Transportation – Vulnerable Sector Screening for new applicants, Criminal Background Check yearly upon renewal – Medical Certificate stating applicant is fit to operate a motor vehicle – Driver training course

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Disruptive Technology

• The emergence of technology based companies is challenging

established industries (transportation, retail, accommodation, service & labour and finance) & highlighting the need for them to adapt in order to compete.

• With respect to taxicabs & limousines, regulators are faced with the

challenge of updating regulations to be more reflective of the changing technological landscape & the transportation needs of the public.

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Uber

• Uber is an international, technology based, company that operates

in 330 cities around the world connecting passengers with vehicles for hire, using a Smartphone application. – In 2012 Uber launched its Canadian operation in the City of Toronto providing licensed limousine service through its UberBlack application. – In 2013 Uber expanded its services to include UberTaxi using municipally licensed taxicabs. – In 2014 Uber launched their UberX service that connects passengers with unlicensed personal vehicles for hire.

• Uber has since expanded into other Canadian jurisdictions including

Montreal, Edmonton, Quebec City, Halifax, & most recently, Calgary.

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Uber Taxi – How it Works

• Municipally licensed taxi drivers register using the App by creating

an account & they turn the App on when they are available for fares.

• Users register by downloading the App, creating a profile, &

attaching their credit card information .

• Users request the UberTaxi option using the App & are provided with

real time GPS tracking of all available UberTaxi vehicles in the vicinity.

• Regular taxi fares apply –payment is cashless - done through the

App.

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Uber X - How it Works

• Drivers register using the App by creating an account & they turn the

App on when they are available for fares.

• Users register by downloading the App, creating a profile, &

attaching their credit card information.

• Users request the UberX option using the App & are provided with

real time GPS tracking of all available UberX vehicles in the vicinity.

• UberX fares are flexible, “surge” pricing is in effect during high

demand periods.

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Uber X (Cont’d)

How it Works:

• Users can track their route using

the App

• At the end of the ride, payment is

automatically made using the App & the user’s credit card - no money changes hands inside of the car

• Reciprocal feedback options:

– Users can provide direct feedback to Uber regarding their Driver; Drivers who receive negative feedback are removed from the App – Drivers can rate Users; Users with low ratings are barred from using the App

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Taxicabs & Uber – How do they Compare?

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Public Perception of Uber

2015 Ipsos Reid Public Consultation of Uber

• Uber is a high tech, fast, accessible transportation offering that

provides greater affordability & control than alternatives.

• Empowers passengers through GPS tracking of vehicle & allowing

them to share their location with someone (passenger safety).

• Payment system is convenient (eliminates need to carry cash/credit

cards).

• Fundamentally different from traditional taxicabs - people should be

free to choose what mode of transportation they want to take.

• Having both taxicab & Uber services make for a competitive

industry.

• Taxicab industry is overregulated - users don’t want the same

experience with Uber.

• Interest from users for municipalities to protect passenger safety &

ensure safe driving amongst providers.

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City of Toronto Experience

• Toronto City staff estimate UberX is growing in the City by 15,000-

20,000 new users each week: – 17,000 Uber X trips/day – 500,000 Uber X trips/month – Approx. 10,000 UberX drivers

• The City of Toronto is concerned that UberX operations pose a risk to

public safety because of the use of unlicensed vehicles for hire, uncertain insurance coverage & the processes used by the Company to screen drivers.

• In November, 2014, City sought court injunction against Uber to stop
• perating unless it obtained a taxicab broker & limousine service

company licence - Court ruled in July, 2015 that Uber’s operations were not captured within the definitions of “taxicab brokerage” or “limousine services company” contained in Toronto’s By-law.

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Canadian Municipal Responses to Uber

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Municipality Response to Uber Toronto Council directed staff to update definitions in bylaw, reduce the “drop fee” & overall fare price, review regulatory requirements to lessen regulatory burden. Ottawa Council directed staff to undertake a review of their Taxi industry, including role of technology. The City has procured a third-party consultant to undertake bylaw review. Region of Waterloo The Region is revising & merging its taxi & limousine bylaws for past year. Currently in public consultation with a draft bylaw that proposes to regulate private vehicles such as UberX as “auxiliary taxicabs” Edmonton Council directed staff to develop regulation for Transportation Network Companies. Alberta insurance industry is developing “ridesharing” insurance.

North American Regulatory Reviews

• Regulators across North America are reviewing their regulatory options

to better address the emergence of Uber; in general, these reviews include: – Reviewing of current by-laws/regulations to determine what changes are necessary to capture new & emerging technologies into the ground transportation industry. – Reviewing municipal by-law definitions:

• Update definition of taxicab broker & limousine service company;

&,

• Ensure Uber’s operation is captured in the definitions.
• Reviewing the possible removal on taxi licence caps
• Reviewing the transferability of municipal licences
• Reviewing the current fare structure
• Review vehicle requirements

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Seeking a Unified Policy Approach to Uber - Meeting with GTA Municipalities

• Given the reach of Uber, & the fact that it is not constrained to traditional

municipal boundaries, Markham City Staff believe a GTA approach (at minimum) to this public policy issue is required.

• On October 9, 2015 City staff met with representatives from GTA

municipalities. – Municipalities present included Toronto, Vaughan, Richmond Hill, Brampton & Mississauga – Uber is presenting a challenge for all GTA municipalities – Recommend taking a coordinated, standardized approach – Discussed reciprocal licensing arrangements

• Municipalities will continue to meet quarterly to provide updates on

enforcement & changes to regulatory requirements.

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Provincial Update

• A private members bill (Bill 131 - Opportunity in the Sharing

Economy Act, 2015) sponsored by Tim Hudak, passed second reading in the Legislature on October 29, 2015.

• Key features of the Bill include:

– Requirement to post clear rates, allow feedback, have policies of non-discrimination with respect to passengers & neighbourhoods & set vehicle safety standards. – Drivers barred from taking street hails & be required to hold a valid licence, proper insurance, a clear criminal record, no more than 3 recent driving violations & be at least 21 years old. – Municipalities would receive stronger enforcement powers - including the ability to level demerit points for repeat offenders such as bandit cabs.

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Interim Steps for Markham

• On

October 27th, Markham City Council adopted recommended changes to the Municipal Act for the Province’s consideration – these included the creation of Provincial standards for regulating the taxicab industry in light of the emergence of Uber & the sharing economy.

• On October 29, 2015, Markham City staff participated a forum in the

City of Toronto on the sharing economy.

• On October 30, 2015, Markham City staff

participated in a Upper & Lower tier Clerk’s meeting to discuss, among other topics, Uber.

• By- law Officer time has been reallocated to allow for greater licensing

enforcement - the City now has dedicated licensing enforcement on a daily basis (including off hours).

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Conclusion

• Many of Canada’s current taxicab laws & regulations were enacted

before the emergence of digital technology & are therefore outdated.

• The growth of the sharing economy & the associated new technologies

is forcing Canadian municipalities, including the City of Markham, to re- examine the traditional taxicab regulations that many feel prevent existing operators from competing with new competitors such as Uber.

• Prescriptive

regulations for existing taxicab

• perators

need to modernized to support greater innovation & reduce red tape while at the same time protecting the public interest & ensuring the health & safety of customers.

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Conclusion

• The outdated Municipal Act regulatory framework has resulted in

different stakeholders within the taxicab industry facing different rules – this “regulatory gap” needs to be addressed.

• Many perceive the emergence of Uber as an opportunity to create new

ways of looking at existing regulatory frameworks – one that keeps only those provisions that are relevant & necessary today.

• Overall, although the taxicab & limousine industries feel that Uber

should be banned, there appears to be strong public support for the services Uber provides

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Staff Recommendations:

1. That staff report back to the General Committee in January, 2016 with amendments to By-law 2012-92 to: a) Revise the current definitions for taxicabs, owners, taxicab brokers & limousine service companies; b) Add additional wording to prohibit the dispatching of unlicensed taxicabs & limousines; &, 2. That staff report back to General Committee in January, 2016 on the establishment of a Taxicab & Limousine Advisory Committee (TLAC) to assist the City in consulting with industry stakeholders; &,

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Staff Recommendations:

3. That staff report back to General Committee meeting in February, 2016, on the following: a) Fare rates; b) A review of the City of Markham’s driver training requirements; &, 4. That staff continue to monitor the status of the Provincial Bill & collaborate with other Ontario municipalities on a unified policy approach to address Uber and report back to General Committee in the Spring, 2016; & further, 5. That Markham’s Taxicab & Limousine Industry be encouraged to review & adopt customer service enhancements including:

• Online payment options
• Real time GPS tracking
• Direct customer feedback mechanism

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Questions?

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